The government has agreed to let Rupert Murdoch’s News Corporation buy satellite broadcaster BSkyB in a deal that will see Sky News placed under independent control.
Rival newspaper groups had complained that giving News Corp, which publishes the Times and the Sun, full control of BSkyB would damage media plurality.
But culture secretary Jeremy Hunt said the offer to hive off Sky News will address such concerns. “The undertakings offered would ensure that shareholdings in Sky News would remain unchanged, and indeed offer it more independence from News Corporation than it currently has,” he said.
News Corp already has a 39 percent stake in Sky. Under the agreement it will still have 39 percent of Sky News, which will be controlled by a new publicly listed company called NewsCo, with the rest distributed among existing BSkyB shareholders.
“While News Corporation continues to believe that the proposed acquisition of the shares in BSkyB that it does not already own will not result in insufficient plurality for any audience in the UK, it has submitted this comprehensive proposal in order to avoid a lengthy and costly review by the Competition Commission,” News Corp said as it welcomed the announcement.
Hunt’s decision will now go to a 15-day consultation period ending on 21 March.
Check out the April issue of Financial Director to read our profile interview with Andrew Griffith, CFO of Sky.
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